annex 1: oig investigations unit - the global fund to ......annexes: investigation of global fund...

ANNEXES: Investigation of Global Fund Grants to Papua New Guinea National Department of Health GF-OIG-14-002

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Annex 1: OIG Investigations Unit

1. The Investigations Unit of the OIG is responsible for conducting investigations of alleged fraud, abuse, misappropriation, corruption and mismanagement (collectively, “fraud and abuse”) within Global Fund financed programs and by PRs and SRs, (collectively, “grant implementers”), CCMs and LFAs, as well as suppliers and service providers.1

2. While the Global Fund does not typically have a direct relationship with the recipients’ suppliers, the scope of OIG’s work2 encompasses the activities of those suppliers with regard to the provision of goods and services. The authority required to fulfill this mandate includes access to suppliers’ documents and officials.3 The OIG relies on the cooperation of these suppliers to properly discharge its mandate. 4

3. OIG investigations aim to: (i) identify the specific nature and extent of fraud and abuse affecting Global Fund grants, (ii) identify the entities responsible for such wrongdoings, (iii) determine the amount of grant funds that may be compromised by fraud and abuse, and (iv) place the Organization in the best position to obtain recoveries through identification of the location or uses to which the misused funds have been put.

4. OIG conducts administrative, not criminal, investigations. Its findings are based on facts and related analysis, which may include drawing reasonable inferences based upon established facts. Findings are established by a preponderance of credible and substantive evidence. All available evidence is considered by the OIG, including inculpatory and exculpatory information.5

5. The OIG finds, assesses and reports on facts. On that basis, it makes determinations on the compliance of expenditures with the grant agreements and makes risk-prioritized recommendations.

6. Such recommendations may notably include identification of expenses deemed non-compliant for considerations of recovery, recommended administrative action related to grant management and recommendations for action under the Code of Conduct for Suppliers6 or the Code of Conduct for Recipients of Global Fund Resources7 (the “Codes”), as appropriate. The OIG does not determine how the Secretariat will address these determinations and recommendations. Nor does it make judicial decisions or issue sanctions.8

7. Recommendations to the Secretariat primarily aim to help identify, mitigate and manage risks to the Global Fund and its recipients’ activities. The OIG defers to the Secretariat and, where appropriate, the recipients, their suppliers and/or the

1 Charter of the Office of the Inspector General (19 March 2013), available at http://theglobalfund.org/documents/oig/OIG_OfficeOfInspectorGeneral_Charter_en/, accessed 01 November 2013 2013. 2 Ibid., § 2, 9.5 and 9.7. 3 Ibid., § 17.1 and 17.2. 4 Global Fund Code of Conduct for Suppliers (15 December 2009), ¶ 17-18, available at http://theglobalfund.org/documents/corporate/Corporate_CodeOfConductForSuppliers_Policy_en/, accessed 01 November 2013. 5 These principles comply with the Uniform Guidelines for Investigations, Conference of International Investigators, June 2009, available at http://www.un.org/Depts/oios/pages/uniformguidlines.html, accessed 01 November 2013. 6 See fn. 4, supra. 7 Code of Conduct for Recipients of Global Fund Resources (16 July 2012), available at http://theglobalfund.org/documents/corporate/Corporate_CodeOfConductForRecipients_Policy_en/, accessed 01 November 2013. 8 Charter of the Office of the Inspector General (19 March 2013), § 8.1

http://theglobalfund.org/documents/oig/OIG_OfficeOfInspectorGeneral_Charter_en/

http://theglobalfund.org/documents/corporate/Corporate_CodeOfConductForSuppliers_Policy_en/

http://www.un.org/Depts/oios/pages/uniformguidlines.html

http://theglobalfund.org/documents/corporate/Corporate_CodeOfConductForRecipients_Policy_en/


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concerned national law enforcement agencies, for action upon the findings in its reports. 8. The OIG is an administrative body with no law enforcement powers. It cannot issue subpoenas or initiate criminal prosecutions. As a result, its ability to obtain information is limited to the rights conferred under the grant agreements, the terms of the Codes, and on the willingness of witnesses and other interested parties to voluntarily provide information.

9. The OIG may also provide the Global Fund Board with an analysis of lessons learned for the purpose of understanding and mitigating identified risks to the grant portfolio related to fraud and abuse.

10. Finally, the OIG may make referrals to national authorities for prosecution of any crimes or other violations of national laws, and supports such authorities as necessary throughout the process, as appropriate. 9

9 See Code of Conduct for Recipients of Global Fund Resources (16 July 2012), § 8.3.


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Annex 1A: Applicable Concepts of Fraud and Abuse

11. As outlined in the previous section, the OIG bases its investigations on the contractual commitments undertaken by recipients and suppliers. It does so under the mandate set forth in its Charter to undertake investigations of allegations of fraud and abuse in Global Fund supported programs. As such, it relies on the definitions of wrongdoing set out in the applicable grant agreements with the Global Fund and the contracts entered into by the recipients with other implementing entities in the course of program implementation.

12. Such agreements with SRs must notably include pass-through access rights and commitments to comply with the Codes. The Codes clarify the way in which recipients are expected to abide by the values of transparency, accountability and integrity which are critical to the success of funded programs. Specifically, the Code of Conduct for Recipients prohibits recipients from engaging in corruption, which includes the payment of bribes and kickbacks in relation to procurement activities.10

13. The Codes notably provide the following definitions of the relevant concepts of wrongdoings:

(i) “Anti-competitive practice” means any agreement, decision or practice which has as its objective or effect the restriction or distortion of competition in any market;

(ii) “Collusive practice” means an arrangement between two or more persons or entities designed to achieve an improper purpose, including influencing improperly the actions of another person or entity;

(iii) “Corrupt practice” means the offering, promising, giving, receiving, or soliciting, directly or indirectly, anything of value or any other advantage to influence improperly the actions of another person or entity;

(iv) “Fraudulent practice” means any act or omission, including a misrepresentation that knowingly or recklessly misleads, or attempts to mislead, a person or entity to obtain a financial or other benefit or to avoid an obligation; and

(v) “Misappropriation” is the intentional misuse or misdirection of money or property for purposes that are inconsistent with the authorized and intended purpose of the money or assets, including for the benefit of the individual, entity or person they favor, either directly or indirectly.

14. The International Financial Institution Anti-Corruption Task Force provides similar definitions.11

10 Ibid., § 3.4. 11 Uniform Framework for Preventing and Combating Fraud and Corruption, International Financial Institutions Anti-Corruption Task Force, September 2006, available at http://siteresources.worldbank.org/INTDOII/Resources/FinalIFITaskForceFramework&Gdlines.pdf, accessed 01 November 2013

http://siteresources.worldbank.org/INTDOII/Resources/FinalIFITaskForceFramework%26Gdlines.pdf


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Annex 2: CCM and PR Comments to This Report

No comments received as at 31 January 2014.

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Annex 3: NDoH Purchase Order – ICT Malaria Test Kits

Vendor 1

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Annex 4: Vendor 1 Invoice for ICT Malaria Test Kits

Vendor 1

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Annex 5: NDoH Receiving Report – ICT Malaria Combo Cassette Test Kits

Vendor 1

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Annex 6: Application for Certificate of Inexpediency

Vendor

Vendor 4

Vendor 1

Vendor 1

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Annex 7: NDoH Rapid Diagnostic Test (RDT) Specifications


Annex 8: NDoH Requisition for Expenditure – Supply of

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Olympus Brand Microscopes

Vendor 1


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Annex 9: Integrated Local Purchase Order and Claim Form (ILPOC) re Purchase of Malaria Drugs from vendor

1

Vendor 1


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Annex 10: Vendor 1 Delivery Note re Artemether

Tablets (50 mg) August 2005

Vendor 1


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Annex 11:

Vendor 1 Delivery Note – Artemether

Injections (80mg & 40mg)

Vendor 1


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Annex 12: Quotations Received re Artemether Tablets

vendor2 Other vendors vendor1 other


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vendor 2 Other vendors vendor 1 other

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Annex 13: Quotations

Injections

Received re 80mg Artemether

vendor2 Other vendors vendor1

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Annex 14: Quotations Received re 40mg Artemether

Injections

Other vendor 2 Other vendors vendor1

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Annex 15: NDoH Memo re Procurement of Drugs

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Annex 16: Quote from

Tablets

Vendor 2 re Efavirenz

Vendor 2

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Annex 17: Memo re Procurement of Nevirapine from

Vendor 2

Vendor 2

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Annex 18: Quotation from Vendor 2 re Supply of

Nevirapine Tablets

Vendor 2

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Annex 19: Memo re Procurement of Nevirapine Tablets from Vendor 2 .

Vendor 2

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Annex 20: Quote from Nevirapine Tablets.

Vendor 2 re Supply of

Vendor 2

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Annex 21: NDoH Memo re Procurement of Nevirapine from Vendor 2

Vendor 2

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Annex 22: Quote From Nevirapine Tablets.


Vendor 2

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Annex 23: Delivery Dates of Nevirapine Tablets to NDoH.

Vendor 2

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Vendor 2

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Vendor 2

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Annex 24: NDoH Memo re Procurement of Efavirenz Tablets from Vendor 2

Vendor 2

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Annex 25: Quote From Efavirenz Tablets.


Vendor 2

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Annex 26: Memo HSIP to HIV principal advisor re emergency order of ARV’s through

Vendor 2

Vendor 2

Vendor 2

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Vendor 2

vendor 2

vendor 2

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Annex 27: Memo from HSIP Director to Acting Director Disease Control Branch re Purchase of Nevirapine from Vendor 2 .

Vendor 2

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Annex 28: CSTB Contract re Purchase of ARV’s from Vendor 2

Vendor 2

Vendor 2

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Annex 29: Quotation from Vendor 2 re Purchase of

Lamistar, Nevilast and Estiva Tablets

Vendor 2

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Annex 30: Receipt from

Vendor 2 re sale of

Lamistar, Nevilast and Estiva Tablets to NDoH.

Vendor 2

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Annex 31: Integrated Local Purchase Order (ILPOC) re purchase of ARV drugs from Vendor 2

Vendor 2

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Annex 32:

Vendor 2 Delivery Note Showing Goods

Delivered to NDoH on 19 May 2008.

Vendor 2

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Annex 33: Invoice from Vendor 2 Showing Prices

Paid by NDoH for Lamistar, Nevilast and Estiva tablets.

Vendor 2

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Annex 34: Memo from Director of Disease Control to HSIP re purchase of ARV’s from

Vendor 2

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Annex 35: HSIP Requisition for Expenditure re purchase of

ARV’s and Opportunistic Infection Drugs from Vendor 2

Vendor 2

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Annex 36: Quote from Vendor 2 re Supply of ARV’s

and Opportunistic Infection Drugs to NDoH.

Vendor 2

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Annex 37: NDoH Receiving Report (Lopinavir/Ritonavir, Tenofovir & Aciclovir tablets) re Order from Vendor 2

Vendor 2

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Annex 38: NDoH Receiving Report (Saquinavir, Fluconazole & Abacivir tablets) re Order from

Vendor 2

Vendor 2

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Annex 39: Inter-Office Memoraundum

Vendor 2

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Nevirapine Tablets to NDoH.

Vendor 2

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Annex 41: Memo re Procurement of ARV and Opportunistic Infection Drugs.

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Antibiotics (Opportunistic Infection Drugs) to NDoH

Vendor 2

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Annex 43: Memo re Procurement of STI/HIV/AIDS Office Supplies

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Annex 44: Quotations Received by NDoH re Procurement of Office Supplies.

Vendor 3

Other Vendor

Other Vendor

Vendor 3

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Annex 45: HSIP Requisition for Expenditure re Purchase of Stationery Items for NDoH.

Vendor 3

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Annex 46: Memo re Single Source Procurement of Reagents from Vendor 4

Vendor 4

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Annex 47: Memo from HSIP to Secretary NDoH re Purchase of Rapid Syphilis Testing Kits

Vendor 4

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Annex 48: Quotation from Vendor 4 re

Quotation for Syphilis Rapid Test Kits

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Annex 49: NDoH Payment Voucher Showing Rapid Syphilis Test Kits were ‘Sole Sourced’ From

Vendor 4

Vendor 4

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Annex 50: Letter from University of PNG School of Medicine to NDoH re SD Test Kits.

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Annex 51: Fresh advances to vendors before acquittals of previous advances for the year 2009

Particulars

Total Amount Outstanding (PGK)

A. Three or more non-Acquittals

Hotel Kimininga

33,493

Lamana Hotel

153,520

Shady Rest Hotel

102,186

Simply Blue Collar Trading

94,990

Subtotal A

384,189

B. Two non-Acquittals

Granville Motel

82,416

Kokopo Village Resort

25,608

Melansian Hotel

55,016

Mt Wilhelm Tourist Hotel

10,674

Opaoti Trading Ltd

28,145

Subtotal B

201,860

C. One non-Acquittal

AB Lodge

60,327

Subtotal C

60,327

D. Others D

367,728

Grand Total (A+B+C+D)

1,014,014

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Annex 52: Fresh advances to vendors before acquittals

of previous advances for 2010

Particulars Total Outstanding (PGK) A. Three or more non Acquittals

Avis Nationwide Rent A Car 32,395 Budget Rent A Car 7,424 Diocesan Pastoral Centre 4,830 Fair Rent A Car Ltd 55,655 Hertz Rent A Car 46,704 Highlander Hotel Hagen 9,801

Hotel Kimininga 77,687 Hotel Poroman 95,670 In Wewak Boutique Hotel 11,594 Kanda Rest House 59,890 Kokopo Village Resort 38,048 Koy's Hire Car Limited 23,700 Kuki Guest House Limited 1,649 Lamana Hotel 32,946 Madang Resort Hotel 123,083 Masurina Lodge 5,496 Melansian Hotel 17,050 MH Supermarket 9,811 Mt Wilhelm Tourist Hotel 3,340 New Century Hotel 2,684 Ningerum Transport Ltd 3,420

No. 1 Hire Car 69,859

Sandaun Surf Hotel, 15,095 Uval No.93 Limited 51,480

Subtotal A 799,312

B. Two non Acquittals

Bird of Paradise Goroka 5,770

Dae Won Wabag Hotel 2,244

Madang Lodge Motel 7,079

Please Pay Cash 95,712

Sea View Hotel 11,491 Subtotal B 122,295 C. One non Acquittal

Bank of South Pacific 10805.5

Birdwing Butterfly Lodge 1034

Comfort Inn 4744

Emmanuel Lodge 36652

Harbourside Hotel 2540

Kimbe Bay Hotel 7980

Vanimo Beach Hotel 3705

Subtotal C 67,461 D. Others 564,458

Grand Total 1,553,525

annex 1: oig investigations unit - the global fund to ......annexes: investigation of global fund...

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